I went from small floorstanders(Vandersteen 1b's) to large bookshelves(B&W 602's) to compact bookshelf monitors(Ascend Acoustics CBM-170's) with varied results.

-I think the Vandy's were better than the
B&W's in their overall sound. If I did not have
a sub I would not even consider bookshelves. I want the low end. That said, my motivation for changing from the Vandersteens was hearing a pair of Paradigm Studio 20's at a local Hi-Fi shop. They sold for more than I paid for the 1b's. A friend who worked at another audio/video shop suggested the B&W's were superior to the 'Digm's. He offered a trade for my 1b's and his own pair of 602's. Since I'd purchased my last sub from him(also from his home system), I had no reason to think he was giving me bad advice. At first I was thrilled with the higher(brighter?)treble energy of the B&W's. After a while they hurt my ears. So I began my quest for my next set of speakers. Since the shop where my friend had worked had fallen prey to financial, as well as the owner's personal issues, I no longer had an inside contact for great deals. I then began searching on the internet. I was looking hard at Aperion(Edge Audio), Axiom, Dahlquist, Swan, HTD, etc. I was very close to purchasing Axiom M22ti's, but the person who was interested in my 602's was surprised on his birthday when his family pulled together and got him a Bose system(LOL!). I had discovered Ascend Acoustics from the "Cheap Home Theater" website and began my investigation of those. Since I had managed to save up enough money to outright purchase a pair of CBM-170's, I figured I'd give them a try. I honestly had low expectations given their $300 price. I put them on the too-low stands the 602's were on and fired them up. WOW! Except for the bottom end, everything improved. Treble was smoother without being harsh or shrill. Midrange had better detail and clarity as well. The bass was leaner than before, but what is there is tight and controlled. Imaging improved and took on a holographic quality. I put the B&W's on consignment at a local shop and recouped 75% of my cost. I bought some nice metal stands! Paired with a good sub this is a "Giant killer"! I would be hesitant to downsize too much in sattelite size as you want the mains to go deep enough to blend with a sub.

Sorry for the long-winded post! The point is, make sure you can live with the sound. Smaller sat's have pluses and minuses, the biggest minus being their ability to seamlessly blend with a subwoofer. Also their dynamics will be limited.

Just my opinion, YMMV.